Lecture Slides Dixit and Skeath Chapter 3. Fig. 3.1 top.
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Transcript of Lecture Slides Dixit and Skeath Chapter 3. Fig. 3.1 top.
Possible Outcomes:
1) Player Doesn’t Contribute and Other Two Players Contribute: “4”
2) Player Contributes and One or Both of the Other Players Contribute: “3”
3) Player Doesn’t Contribute and One or None of the Other Players Contribute: “2”
4) Player Contributes but Neither of the Others Contribute: “1”
StrategiesA “Strategy” specifies how you would move in all possible situations:
Emily has two: C, D
Nina has four: CC, CD, DC, DD
Talia has sixteen: CCCC, CCCD, CCDC, CCDD, CDCC, CDCD, CDDC, CDDD, DCCC, DCCD, DCDC, DCDD, DDCC, DDCD, DDDC, DDDD
Optimal Strategies
Optimal Strategies are those that a player would choose:
Talia: DCCD
Nina: DC
Emily: D
The “Equilibrium Path of Play” is the path that is followed when the players play their optimal strategies.
Order Advantage
First-mover Advantage:
Benefit from committing yourself to an action and forcing other players to adapt
Second-mover Advantage:
Benefit comes from having the flexibility to respond to the other player’s choices